The Relationship Between Road Infrastructure Budgetary Expenditures and Commercial Property Investment Returns. Case Study of Fadikpe Area Minna, Nigeria

Abstract

The paper examines the relationship existing between commercial property investment returns and public capital investment (budgetary expenditures) on road infrastructure in Fadikpe area, Minna (Nigeria) with the aim of determining the degree of impact of public capital investment on commercial property investment returns. The paper addresses a pertinent policy and practice question on the impact of government’s budgetary expenditures on real estate sector of the economy. Government increasingly faces funding challenges in providing new infrastructure or improvement of existing ones, thus, keen to know the areas of greater impact of its expenditures and the extent to which the benefits from the impact may go in augmenting or providing funds (through tax) for new road infrastructure provision or repair of existing ones. The research uses the before-and-after case method to identify an increase in property values (rental and sales) as measured by the trend of property investment returns before-and-after budgetary expenditures. The results show that commercial property investment returns in the area increased after budgetary expenditure (road construction) took place. The results form the basis upon which the government should consider more budgetary allocations and expenditures related to road transportation infrastructure in its budgetary allocation decisions. The results also quantify the proposed alternative source of funding (property tax) that can be harnessed via capturing the increase in property investment returns.

The Econometric Approach of the Impact of Public Investment in the Road-Infrastructure in the Economic Growth of Kosovo

“…Another study indicates that governments should consider more funding road transportation infrastructure through its budgetary allocation. Additionally, decisions should be considered related to quantifying designed alternative source of funding (property tax) that can be harnessed via capturing the increase in property investment returns (Yakubu, Adeyemi, Sule, & Ogunbajo, 2020). Studies show that developing economies invest less on schools than on roads, both in relative and absolute terms, as a fraction of GDP (Atolia, Li, Marto, & Melina, 2017) A study from (Nyasha & Odhiambo, 2019) stated that is a greater chance that the impact of government spending can lead to the growth of the real sector, especially when expenditure is on growth-enhancing activities such as domestic public investment that crowds-in private investment -such as targeted economic infrastructure development study showed that national competitiveness is influenced basically by the level of institutional development and other seven factors, including infrastructure, in turn, infrastructure factor is determined mainly by the quality of roads, railroad infrastructure, air transport and electricity supply (Palei, 2015) The latter is mainly determined by electricity supply, roads quality, railroad infrastructure, and air transport.…”